[09-20-99 07:21 PM ET] CBS.MW INTERVIEWS THQ CEO ON THQs EXECUTION-BASED BUSINESS MODEL.
"...The market for video games is expected to grow to $12 billion in the next two years. THQ Inc. (THQI: news, msgs) is a player in the industry that develops, publishes, and distributes many of these games -- including the Rugrats games...THQ Chief Executive Brian Farrell, whose stock has risen from a split-adjusted $1 in mid-1995 to $40 Monday, spoke with MicroCap1000.com, about how THQ plans to continue its growth...Your Earnings per share ratio has grown 136 percent over the last three years and revenues have grown 94 percent. What's driving your business?
Farrell: We have a great marketplace right now for PlayStation, Nintendo 64, PC and the Game Boy color version. We've really succeeded in bringing quality products to market on a timely basis with some excellent marketing programs behind them, and [we're] just continuing on our execution-based business model...We'll have the Rugrats on the Playstation, and we'll probably ship more of our Game Boy color, and Nintendo 64. Then Toy Story 2 on the Game Boy color. It's the movie sequel, and we've got a Game Boy color sequel. That was our biggest selling Game Boy title ever. I?m leaving out a lot because we've got, I think, 17 products between now and the end of the year, but those should be the drivers of our business...What's the outlook for your Rugrats products?
Farrell: It?s great. In the back half of this year, we have a sequel to our top selling PlayStation game last year and another Game Boy color game coming, as well. As we go into 2000, there will be a new Rugrats movie next year we?re advised by Nickelodeon, and we?ll have a Nintendo 64 and PlayStation game in time for the movie next year. That franchise appears to have a lot of legs. It?s way up in the children?s television ratings, and has a lot of momentum...As we go into the fourth quarter, I think the PlayStation Rugrats and the Nintendo 64 wrestling will pretty much vie for the champion...We'll be a little more heavily weighted toward Playstation, and that's a better margin product for us. As we go more and more into the future, we'll have more and more of our products on disk, which are much higher margins for us...Will you continue to be on the acquisition trail?
Farrell: It's got to be strategic, but we do look at a lot of opportunities. Unless it adds either content or key distribution, we?re not interested. We?re not looking to bulk up just for size?s sake. It?s got to be strategic to drive the business and earnings potential forward.
In the middle of 1995, the stock was around $1. Now you're at $34. How do you plan on continuing to build shareholder value going forward?
Farrell: We have a great business model for this business. We understand the creative side, and I think we've been very successful at marrying the business side of the business to the creative side. We think that model will work in 1999, 2000 and 2001. The overall market for video games is estimated to grow to about $12 billion in the next couple of years, and we're still a relatively small player. We think that we can continue to take market share and that our business model is one that works, not only in 1999, but into the future. We are very positive about the future growth prospects for THQ..."
Source: © September 20, 1999 CBS.MW
cbs.marketwatch.com [emphasis added]
¸ copyright 1996-1999 esecurities.com corporation and WallStreetRadio.com (tm) Newswires. All Rights Reserved. |
